Regulatory Alerts2016-07-26
Added · Updated
Enforcement Decree of the Act on Corporate Governance of Financial Companies
The Enforcement Decree of the Act on Corporate Governance of Financial Companies extends disqualification criteria for officers with conflicts of interest and tightens rules on outside directors to all financial firms, rather than just banks and financial holding companies. Financial firms with assets exceeding KRW5 trillion must appoint at least three outside directors, ensure the board chairperson is an outside director, and implement a compulsory CEO succession plan. These firms are also required to implement performance-based pay for officers and employees, with a portion of officer pay deferred for at least three years. Additionally, the biennial fit and proper assessment for largest shareholders is expanded to include insurance companies, financial investment services providers, and consumer finance companies, with the decree taking effect on August 1, 2016.